Startup India Scheme is an initiative by the Government of India for generation of employment and wealth creation as well as for the development and innovation of products and services. Benefits of Startup India Scheme is Simplification of Work, Finance support, Government tenders, Networking opportunities.
Features:
In order to motivate the startups, the government provides various financial supports. These steps taken by the government are as follows:
The government has set up a corpus of Rs.10,000 crores for 4 years (Rs.2500 crore each year). From such fund, the government invests in various startups.
Special funds are provided, investment in which leads to exemption from the income tax on the Capital Gain. Income tax exemption is available for the startups for the first 3 years after the incorporation.
Under The Income Tax Act, where a Startup (company) receives any consideration for issue of shares which exceeds the Fair Market Value of the shares, such excess consideration is taxable in the hands of the recipient as Income from Other Sources.
Investment by venture capital funds in Startups is exempted from the application of this provision. The same extends to the investment made by incubators in the Startups.
Benefits:
Financial Benefits
In order to register their patents, the start-ups have to incur a heavy cost which is known as the Patent Cost.
Under this scheme, the government provides 80% rebate on the patent costs. Moreover, the process of patent registration and related is faster for them. Also, the government pays the fees of the facilitator to obtain the patent.
IP facilitator scheme
The objective of the scheme is to enhance awareness of MSME about Intellectual Property Rights (IPRs) to take measure for the protecting their ideas and business strategies. Effective utilisation of IPR tools by MSMEs would also assist them in technology upgradation and enhancing competitiveness.
For effective implementation of the scheme, facilitators are there to provide general advisory on intellectual property rights to start ups on pro bono basis, providing assistance in filing and disposal of the IP applications related to patents, trademarks and Design under relevant Acts etc.
Income Tax Benefits
Startups enjoy a good amount of benefits under the Income Tax head. The government has exempted their income tax for a period of 3 years, post the incorporation year.
Faster registration
Under the Startup India scheme, an application is there to facilitate registration as a start-up in www.startupindia.gov.in. A single meeting is arranged at the Start-up India hub. Also, there is a single doubt and problem-solving window for them.
Easy access to Government tenders
Under this scheme, the startups get priority in getting government tenders. Also, they are not required to have any prior experience.
Conclusion:
The Government is trying to make the environment very conducive for the start-up ecosystem to flourish in India. However, the start-ups sometimes miss out on opportunities facilitated by the Government due to lack of procedural and technical knowledge. Just for that reason, an experienced professional in this field can make the process easier for start-ups so that they get access to all the facilities made available by the Government.